'Innovation is the key when it comes to growth': WealthWise Financial CEO

Loreen Gilbert, WealthWise Financial CEO, joins Yahoo Finance to discuss investment themes to watch out for and an outlook on equity markets.

Video Transcript

MYLES UDLAND: Stay on the markets and everything happening now. Loreen Gilbert joins us now. She's the CEO of WealthWise Financial. Loreen, let's start with the retail sales and I guess just the way that stimulus, whether the choppiness of the data is likely to unfold and how you're anticipating maybe some kind of strange numbers perhaps on the upside, likely on the upside as we get into March and April and how you guys are thinking about that.

LOREEN GILBERT: Right. Well, I would say that we came off a very strong end-of-year number. And we were expecting a lower number recently. And we expect it to surge again going forward, especially now with $1.9 trillion of stimulus.


And we oftentimes say don't fight the Fed. But in this case, it's don't fight the stimulus. And those checks going out to people, $1,400, will hit the economy, whereas before, I think people were saving money and paying down debt. And I think on this check, we're going to see more spending.

BRIAN SOZZI: Well, then if it's true don't fight-- don't fight the stimulus checks, and those checks are looking pretty large, what sectors are you recommending to clients?

LOREEN GILBERT: Well, I'd say we're in the middle of a significant rotation from growth to value. And so while we're seeing this fits and starts this year, if you really look at the numbers, it's the value side of the equation where we're moving forward. And if you also look at the disparity between the S&P 500 and the Russell 1000, you have to go back to 2000 to see the disparity in-- in the relative valuation.

So if we look at that and say, where do we go from here, I would say to investors to start looking at value. And so certain sectors that are classically value would be some of the sectors to look at. And I would say what we've seen year to date, financials is one of them. Certainly, that's been a leader as far as sectors are concerned and is a value investment. But I'd also say industrials, especially as we're now looking at another package that would include infrastructure.

MYLES UDLAND: Well, and I guess, Loreen, how different of an environment is it for investors who are now kind of changing-- I guess we're kind of changing landscape, right. I mean, for the last 10 years, it's been just buy growth, don't worry about it, it's everything's going to be fine. How different is that for-- for folks that you're talking to who don't understand why they can't just buy tech stocks and then set it and forget it in this kind of environment?

LOREEN GILBERT: Yes, and I would say that what we're talking to investors about is to have a different mindset than maybe, like you said, the past 10 years. Going forward, we'll still see innovative stocks move the needle, so innovation is the key when it comes to growth, but to add into your portfolio value stocks and to think of it as dividend-paying stocks. And when we look at where the Treasury yield is right now, we've seen a spike in the Treasury yield and concerned about fixed income, more investors will be looking to dividend-paying stocks as perhaps an alternative to keeping as much in fixed income.

BRIAN SOZZI: But don't you think we're-- we're overdue or could be nearing some form of short-term correction in the markets? I mean, the markets have climbed steadily, but we're not getting an improvement in economic data. So many folks are saying, look, Brian, I'm looking for 8% GDP growth in the first half of this year, where is it? You know, the retail sales data today was pretty disappointing. At what point does the market say, you know what, it's time to lighten our load here until data improves?

LOREEN GILBERT: Well, I would say we're still expecting quite significant GDP numbers. So if we look at expectations between 6% and 8% this year, that's phenomenal. We have not seen that since 1984, I believe. I mean, it's been quite a-- it's been decades, let's put it that way. It's been decades since we've seen those kind of numbers in our GDP.

So I'd say that we're looking at a good year ahead. So I wouldn't-- I'd say we're fully in recovery mode. And so what I'd look out for are valuations that are extremely extended and to take profits off of those areas of the market and to add into other areas that we haven't seen as much run-up, so the areas of the reopening trade like leisure and travel, different things like that. I think those are the areas that we're going to start seeing some pops in.

MYLES UDLAND: All right, Loreen Gilbert, CEO at WealthWise Financial. Loreen, always great to get your thoughts. Thanks so much for jumping on this morning. I know we'll talk soon.